CMB International: Lowered target price of Great Wall Motor to HKD 19, maintaining "buy" rating.

CMBC International released a research report, stating that the target price for Great Wall Motor's H shares (02333) has been lowered from 20 Hong Kong dollars to 19 Hong Kong dollars, while the target price for A shares has also been adjusted downwards. Both are maintained with a "buy" rating. The bank maintained its total sales forecast for Great Wall Motor of 1.49 million units in 2026, but raised expectations for domestic and export sales, projecting a 19% year-on-year increase in net profit to 11.8 billion yuan in 2026. In the fourth quarter of 2025, the company's revenue increased by 16% year-on-year to 69.2 billion yuan, reaching a historical high and exceeding the bank's expectations by 9%. The gross profit margin narrowed by 1.1 percentage points to 17.3% quarter-on-quarter, exceeding expectations by 0.2 percentage points. The better-than-expected performance of the gross profit margin was offset by increased sales and management expenses. Ultimately, the core net profit, excluding government subsidies, VAT refunds, and Russian scrapping tax refunds, was 407 million yuan, in line with the bank's expectations. The company's E-MA Platform supports multiple powertrains with a parts commonality rate of nearly 85%. With cost optimization brought by the new platform, at least four new models of WEY in 2026 are expected to be competitively priced. The bank raised its sales forecast for WEY in 2026 to 200,000 units, doubling from 2025. In addition to WEY, the bank expects exports, especially growth in the tank brand export (with an export target of 100,000 units in 2026), to increase average selling price and support gross profit margins. Based on the current geopolitical landscape, the bank raised its forecast for export sales in 2026 to 620,000 units. It is expected that the average selling price will increase by 1% year-on-year to 171,000 yuan in 2026, with a gross profit margin rising by 0.1 percentage points to 18.1%.